How To Become a Certified Financial Planner (CFP)

What Do Financial Advisors Do?

Financial advisors are experts in financial planning, investment management and other areas of financial services. They mainly help clients, which could be individuals, groups or other firms, achieve financial goals. Some financial advisors advise clients on a broad range of topics. Others will focus specifically on one financial topic or situation. For example, a financial advisor who’s also a certified public accountant (CPA) may focus on tax management. Some advisors also work with specific clients, like professional athletes or individuals creating estate plans.

In order to showcase their expertise in a tangible way, advisors may put in the work to receive advanced certifications. Two of the most common options are the chartered financial analyst (CFA) and certified financial planner (CFP) certifications.

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Bottom Line

CFA and CFP certifications are both common for financial advisors. For prospective clients, working with an advisor who has one or the other may not make a huge difference. Both certification programs teach applicants how to handle someone’s financial future.

If you are considering a career in finance and want to add a certification to your resume, then it’s worth figuring out exactly what you want to do. CFAs typically work more in the field of financial analytics and investing, while CFPs usually focus on financial planning with individual clients. Keep in mind that getting a CFA is also a longer process with more exams.

After You Receive Your CFP® Certification

Once you have your CFP® certification, as a CFP® professional each year you will be required to pay an annual certification fee and submit a renewal application, where you will confirm that you are adhering to CFP Board’s Code of Ethics and Standards of Conduct to maintain CFP® certification. In addition, every two years, you will be required to complete continuing education (CE).  

If you do your continuing education credits through Kaplan, we’ll submit your completions for you! To view our continuing education offerings for CFP® certification, please visit our CFP® certification CE page. You can also learn more about all our CFP offerings on our CFP® Education page.

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Are you ready to get started on the path toward financial planning certification with your CFP® certification education? Enroll with College for Financial Planning®—a Kaplan Company by visiting our website browsing our CFP certification offerings or calling a designation specialist at 800.237.9990 Option 2.

Upward Mobility

Becoming a financial advisor offers the opportunity for upward mobility without changing careers. Financial advisors can continue to take on more and better-paying clients to increase their earnings over time. They can move from working for firms to setting up their own businesses, as well.

Financial planners can also pursue other positions, like financial manager, to advance professionally. Financial managers oversee organizations’ long-term financial goals. They supervise employees, advise management on financial decisions, and find ways to maximize profits and minimize costs.

Financial managers earned a median annual salary of $134,180 as of May 2020. The BLS projects a faster-than-average 17% employment growth rate for financial managers from 2020-2030. These managers usually need at least five years of experience in financial or business positions. Some obtain optional certifications, but they do not need higher education beyond a bachelor’s degree.

Discover salary ranges for financial planners

Step 4. Earn the Required Experience

The CFP is about more than just studying and test-taking. The CFP Board also requires that candidates have significant real-world, client-facing experience under their belt before they can earn the credential.

There are two routes to accumulating the required experience for earning the CFP. You’ll need to amass at least 6,000 hours of experience through the Standard pathway, or 4,000 on the Apprenticeship pathway, here’s how:

Standard Pathway

The standard pathway assumes you’re earning experience on your own in the course of providing client-facing services or in another role, either as an independent advisor or as an advisor representative or other employee of a larger firm.

That experience can involve personal delivery, supervision, direct or indirect support work, or teaching.

You can acquire it through a variety of activities and in a number of professional settings, but it must include one or more of the seven primary elements of the personal financial plan process:

  1. Understanding client personal and financial circumstances
  2. Identifying and selecting goals
  3. Analyzing current and potential courses of action
  4. Developing the planning recommendation
  5. Presenting the planning recommendation
  6. Implementing the recommendation
  7. Monitoring progress and updating the plan

Apprenticeship Pathway

An apprenticeship path assumes a more carefully supervised and directed experience, which is why less of it is required. Instead of only one or more of the elements of experience listed for the Standard pathway, your apprenticeship must cover all seven of them. It can only be earned with personal delivery to individual clients, and it must be completed under the direct supervision of a current CFP professional, with documentation filed directly with the CFP Board to attest to your completion.

Examination

The CFP examination is a six-hour, computer-based exam consisting of a combination of multiple-choice and constructed-response questions. The exam focuses on specific elements of the FP Canada Standards Council Competency Profile and integrates across financial planning areas.

Learn more about the CFP examinationFAQ: CFP EXAMINATION

Education Requirement

The educational requirement has two parts: first, complete the required coursework in personal financial planning, estate planning, risk management, professional conduct, and other subjects covered on the CFP® exam through a CFP Board registered program before taking the exam; and second, receive a bachelors degree or higher from an accredited college or university up to five years after the date you pass the exam (degree may be in any discipline, not just financial services).

CFP® Professional Requirements

To becoming a CFP®  professional, you must:

  • Complete a CFP Board-registered education program. You can choose from several options for your education. CFP Board must be notified when you’ve completed it. Many of the coursework providers can do that for you.
  • Sit for the CFP® exam. You can do this once CFP Board has been notified of your education completion. The CFP® exam is offered three times a year in March, July, and November. You must take the exam within the 8-day window at one of the approved locations provided by CFP Board. You are permitted to register for the exam before you complete your program, but CFP Board must receive verification of your education completion by the education verification deadline, or you’ll be charged a $100 withdrawal fee.
  • Hold or earn a bachelor’s degree from an accredited university or college within five years of passing the CFP® exam. You can sit for the exam beforehand, but you need to make sure you complete your degree in that 5-year window.
  • Demonstrate financial planning experience. This can be professional experience (6,000 hours) in relevant personal financial planning activities, or apprenticeship experience (4,000 hours) that meets additional requirements.
  • Pass CFP Board’s Candidate Fitness Standards. To do this, you must agree to adhere to their ethical standards. You also must disclose any criminal or employment termination history and pass a background check. For more information about the ethics requirement, you can visit CFP Board website here.

Candidates are most concerned about the CFP® exam. Here’s what you need to know.With financial advising projected to be one of the top 10 fastest growing occupations, getting your CFP® mark can help set you apart in the financial advising industry.

Maintaining CFP Certification

CFP certification is valid for one year. To maintain certification, CFP professionals must renew their certification by March 31 each year. There are several requirements that CFP professionals must attest to in order to renew their certification.

CFP® CERTIFICATION POLICIESLearn more about maintaining CFP certificationReinstate your CFP certification

What work experience does a CFP need?

Along with the education requirements, a CFP needs 6,000 hours of relevant experience in the financial planning field or 4,000 hours of apprenticeship experience under the supervision of a licensed CFP professional. The CFP Board requires you to have experience that shows you can provide financial planning independently, and you can get this experience in a variety of ways. For example, you could get an internship, participate in the Financial Planning Association Residency Program, support or supervise the financial planning process, teach classes related to financial planning or work with clients directly.

The CFP Board may want to know that you can successfully:

  • Build a professional relationship with the client

  • Collect information about the client and their financial goals

  • Evaluate the client's financial status

  • Make recommendations for financial planning

  • Enforce the recommendations

  • Monitor the recommendations

What are the benefits of becoming a CFP?

The benefits to becoming a certified financial planner include:

  • You stand out as a job candidate: When you apply for positions as a financial planner, having your certification can show employers that you're qualified to provide financial counseling to clients and you've completed the comprehensive training that the CFP Board requires.

  • You strengthen your financial planning skills: Taking the coursework of a board-registered program and gaining experience in the industry can allow you to learn more about financial planning and how to best meet your clients' needs.

  • You can advance in your career: With your CFP Board certification, your employer may offer opportunities to work with more clients or expand the financial counseling you provide.

  • Your clients may perceive you as more trustworthy: Informing your clients that you're a certified planner can help you establish trust with them, and they may view you as a credible resource to make recommendations.

Related: Guide To 20 Types of Financial Advisors (With Salaries and Duties)

Which Certifications Should a Financial Planner Have?

The CFP (certified financial planner) is a particularly prestigious designation. One of the oldest in the profession, it requires years of experience, successful completion of standardized exams in several areas, a demonstration of ethics, and a college degree—as well as ongoing education in the field.

If a planner wants to delve more deeply into investments and advise clients about them, they might also obtain a CIMA (certified investment analyst).

Choose Your Path to Certification

Here are some of the most common paths to CFP® certification. Typically, it takes 18-24 months to become a CFP® professional, but the certification process offers flexibility so you can make it work for you.

How Do I Get Financial Certifications?

Financial certifications are usually awarded by a designated industry group, association, or degree-granting institution. Their requirements often include the taking of certain courses and the passing of exams, a certain number of years' experience or apprenticeship in the profession, a college degree, membership in the association, and a commitment to ongoing education in the field.

Continuing Education Requirement

Once a financial professional has been approved for the CFP® mark, they will need to recertify with 30 hours of continuing education (CE) credit every two years, including three hours of ethics CE credit. The American College of Financial Services offers many programs with opportunities to earn CE credit.

Required Licensing and Certifications in Financial Planning

Depending on the career level and job duties, becoming a financial advisor may require a license. Certifications are optional but can lead to better job opportunities. Licensing requirements for financial planners vary by state and career.

Financial advisors who give specific types of investment advice, along with professionals who buy or sell stocks, bonds, or insurance policies, may need one or more licenses. Financial advisors who do not participate in these activities may not need to earn licensure.

Financial planners who work at large companies may need to register with the SEC. The North American Securities Administrators Association’s website provides additional details about state licensing board requirements for registered investment advisors.

Optional Degrees and Credentials

Financial planners can pursue optional degrees and certifications to demonstrate their mastery of the field and advance professionally. A master’s degree in business administration, accounting, or finance can help financial planners qualify for advanced personal financial advisor jobs with higher pay.

Optional certifications in financial planning, like the certified financial planner credential, can also improve a financial advisor’s reputation. Many employers prefer to hire financial planners with the CFP certification. Maintaining credentials typically requires professionals to complete continuing education credits.

The CFP Board delivers the certified financial planner credential. Applicants must meet education and experience requirements, pass an exam, and agree to a code of professional ethics.

Learn how to become a Certified Financial Planner

Step 6. Renew Your Credential

Meeting all the requirements for earning your CFP isn’t all there is to being a Certified Financial Planner, however. You are also subject to meeting certification renewal requirements every two years.

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Those requirements are:

  • Pay the annual fee of $355
  • Complete 30 hours of continuing education, including 2 hours of CFP Board-approved ethics education
  • Submit a completed application form

You may also have to undergo additional background screening if any matters come to light that could implicate you in conduct contrary to the Boards ethical standards.

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